Investopedia/Shoshanna Delventhal: A New Generation of $1 Billion Unicorns Is Born: The Class of 2019

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A New Generation of $1 Billion Unicorns Is Born: The Class of 2019

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By Shoshanna Delventhal
Updated Mar 22, 2019

As well-known tech behemoths such as sharing economy pioneers Uber, Lyft, Airbnb, and other giant "unicorns" plan to go public, a new class of companies that reached $1 billion valuations in 2019 is right behind them. These newly born unicorns are grabbing investors attention as their sheer size implies that they may go public in the next few years.

The group of red-hot companies includes 10x Genomics, 360 Enterprise Security Group, N26, Hims, Databricks, Calm and Aurora Autonomous, according to an in-depth story by Business Insider. This is the first of two Investopedia articles covering these unicorns, and the second will be published on Friday afternoon.

A Look at 7 New Unicorns

    10x Genomics; $1.3 billion; a gene sequencing system company
    360 Enterprise Security Group; $3 billion; Internet cybersecurity platform
    N26; $2.7 billion; mobile banking services provider
    Hims; $1.1 billion; online platform for wellness products
    Databricks; $2.75 billion; data analytics platform
    Calm; $1 billion; meditation app
    Aurora; $2.6 billion; autonomous car technology

Source: Business Insider
Tech Dominates the Billion-Dollar Valuation Club

Last year, nearly 100 companies achieved unicorn status, per Pitchbook data cited by Business Insider. The research firm counts 14 startups that have been inducted into this small but growing group of privately-backed companies. Out of the 14 covered in Investopedia’s two reports, nine are based in the U.S., two are headquartered in China, one in Germany and another in France. Nearly all of the 2019 unicorns are tech-focused, and all of them are tech-centered, including an online beauty products company and a meditation app. This elite group of startups develops products in high-growth areas such as artificial intelligence (AI), autonomous cars, and healthcare analytics.
World’s First Mental Health Unicorn

Calm, a seven-year-old meditation and wellness app, reached a $1 billion valuation back in February when it announced the close of an $88 million Series B financing round. The company is expected to continue to gain popularity as meditation and mindfulness become more mainstream. According to the CDC, the use of meditation increased by more than threefold from 2012, the year Calm launched, to 2017.

The platform generates revenue on a subscription basis, offering its users guided meditation sessions and other products such as “Sleep Stories.” Additionally, Calm has diversified outside of its core app, investing in firms such as xPresSpa, a chain of quick spa stores in airports, and inking deals with partners like American Airlines Group Inc. (AAL), which offers the app’s content via its in-flight entertainment system. The firm says it quadrupled its revenue last year, is now turning a profit, and is expecting to make $150 million in sales this year.
Amazon Backs Self-Driving Car Startup

Also last month, self-driving car player Aurora saw its private valuation surge on news of a funding round led by Sequoia Capital. The $530 million Series B round was also joined by e-retail and cloud behemoth Amazon.com Inc. (AMZN), as the tech titans gear up to race against one another in the next-generation auto space.

The three-year-old startup, which offers a full-stack self-driving software system for automobile manufacturers, was founded by a group of former executive-level employees at other companies working on driverless tech. The management team lists stars including Chris Urmson, the former leader of Alphabet Inc.’s (GOOGL) Waymo project, and Sterling Anderson, the previous head of Tesla Inc.’s (TSLA) autopilot team.
Looking Ahead

It’s important that investors keep in mind that no matter how attractive these unicorns may look now, it remains unclear how many of them will survive in the long-term. Ride-hailing competitors Uber and Lyft, for example, have been under scrutiny as they lose massive amounts of money. The public markets may stop being friendly to them until they prove they can turn a profit.
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